Startups to watch

Led by former AltaVista CEO Jim Barnett, Turn.com is offering online advertisers something many have craved for years: precise, automated ad targeting combined with a system that requires them to pay only for specific desired results.

Call it pay-per-play.

To get started, advertisers first enter the prices they're willing to pay for various results - $5 for a sales lead, say, or $50 to $60 for a completed transaction. Next, they upload their text-or graphics-based display ads. Turn's software then analyzes the ads using more than 60 variables - including content, brand strength, and keywords - and determines the right publishers to serve up the ads. Turn splits the revenue (70-30, on average) with the publisher.

Since launching in beta in November, the company has signed up more than 1,000 advertisers and cranked more than 5 million ads through its analysis engine.

Twenty-five publishers are giving the system a tryout, according to Barnett, including a few large news sites and a big social network (which he declines to name).

As for competitive threats, Google has been rumored to be working on its own version of the pay-per-play model. But Barnett says the $16 billion-a-year online ad industry is growing so fast that he doesn't worry about Turn's ability to carve out a lucrative niche: "These days marketers need to use all the targeting approaches they can find."

Tell us what you think: Will Turn's pay-per-play model succeed?

Funding: $17.5 million (Norwest Venture Partners, Shasta Ventures, Trident Capital)

Cofounders: Jim Barrett (also CEO), John Ellis (shown above)

Headquarters: San Mateo, Calif.

Employees: 26

Founded: 2005

Business model: Advertising

Bragging rights: 25 million unique viewers to date; 1,000 advertisers; 20 publishers

Next up: Signing more publishers

Contact: Business2@turn.com